36

This, That and the Other Thing

Winning isn’t everything, at least as it pertains to the Edmonton Oilers when it comes to the value of NHL teams. Despite making the playoffs in just one of the 11 seasons Daryl Katz has owned the Oilers, the team is today worth more than triple what Katz paid for it back in 2008.

In Forbes latest valuation of NHL franchises, their 20th such list, the Oilers are listed as being valued at $540 million U.S., or just a touch over $725 million CAD based on latest exchange rates. Katz purchased the Oilers for $200 million CAD from the Edmonton Investor’s Group in a sale that was approved by the NHL in June of 2008.

The valuation of $540 million has the Oilers ranked 13th in the NHL (they ranked 24th in 2009), just behind the Vegas Golden Knights ($575 million) and just ahead of the Dallas Stars ($525 million). The values listed by Forbes are through the 2017-18 season. This list was released back in December, but I don’t recall seeing it before today. The top five teams in the Forbes list are:

  1. New York Rangers ($1.55 billion)
  2. Toronto Maple Leafs ($1.45 billion)
  3. Montreal Canadiens ($1.3 billion)
  4. Chicago Blackhawks ($1.05 billion)
  5. Boston Bruins ($925 million)

The entire Forbes valuation list is here.

BARGAIN

Katz actually made five different offers to the EIG, starting at $145 million CAD in May 2007 and escalating up to $188 million CAD, with each offer being rejected, before making the $200 million CAD bid that was eventually accepted. Suffice to say, the purchase has proven to be a smoking deal for Katz. Not so much for fans, who have seen the Oilers make the playoffs just once, 2016-17, since the sale of the team.

Save for that season, when the Oilers won 47 games, finished with 103 points and made it to the second round of post-season before being eliminated by the Anaheim Ducks, and 2008-09, when the Oilers won 38 games had 85 points (.518), the team hasn’t finished above .500 in points-percentage during Katz’s tenure as owner.

By comparison, the expansion Golden Knights, one spot up on the Oilers on the Forbes list, have made the playoffs in both of their NHL seasons while the Stars, right behind the Oilers in value, have qualified for post-season three times in the last 11 seasons. As for the top five teams in terms of value, it looks like this:

New York Rangers – playoffs eight of 11 seasons
Toronto Maple Leafs – four of 11
Montreal Canadiens – seven of 11
Chicago Blackhawks – nine of 11/SC winner 2010, 2013, 2015
Boston Bruins – nine of 11/SC winner 2011

WHILE I’M AT IT

  • If you’re looking for a good time in support of a great cause, swing by Polar Park Brewery this Thursday for a Hot Stove with former Oilers’ coach Ron Low from 5-9 p.m. The cost is $25 per person and you get a free beer, chicken wings, pizza, a chance to talk hockey with one of the great story-tellers in the game and a silent auction. Proceeds go to Hockey Helps the Homeless.
  • So, the 2019 Calder Trophy finalists are Jordan Binnington of St. Louis, Rasmus Dahlin of Buffalo and Elias Pettersson of Vancouver. The award will be voted on by the Professional Hockey Writers Association based on the regular season. It’s Pettersson in a landslide, no?

HOCKEY HELPS THE HOMELESS

Last year, the fifth edition of Hockey Helps the Homeless in Edmonton had a record year by raising $200,000 to assist the Mustard Seed and Jasper Place Wellness Centre in helping the homeless and those living in poverty.

With the event fast approaching May 10 at the Terwillegar Rec Centre, we’re hoping citizens of Oilersnation step up to help, as they always do, to make HHTH the biggest success yet. Last year’s response was fantastic, thanks in large part to the 10th anniversary Oilersnation party that raised $5,000 for HHTH, with every penny staying right here in Edmonton.

In these final days leading up to the tournament, we’re hoping to sell as many $1,000 pennant sponsorships, and $100 Mega-Raffle tickets as we can. If you own a small business or want a keepsake for the games room at home, pennant sponsorships are perfect – you get a pennant with your company logo signed by our pros. With the Mega-Raffle, just 100 tickets are printed. The winner gets a Theatre Suite for 10 guests, food and a bar tab at an Oilers game next season hosted by Ron and Linda Low. Good times.

You can check out the website, purchase pennant sponsorships and Mega-Raffle tickets or donate here.

Previously by Robin Brownlee



  • Gravis82

    people people still show up, watch TV and buy merchandise. Those outputs fall off faster in some markets after poor performance than in others. In Canadian markets is almost impossible for poor performance on the ice to impact these purely economic indicators of success. But I think we will start to see it next year, and then things may actually start to change.

  • RexHolez

    I’m sorry for piling on… but I’ve been an Oiler fan since before I could walk. I was raised to be one. Hemsky is 1 year younger than I am and I remember being mad at Lowe for wasting his career. How many natural talents have we had since? I’m sorry, but this franchise has completely lost me. My childhood team has without a doubt become the joke I laugh at. I wish it wasn’t funny, but look how pathetic they are. What else can you do but laugh?

  • RexHolez

    My only hope is that whoever the new GM is comes and gets rid of every single person in management. For the love of Gord, start fresh, because whatever they’ve been doing doesn’t work. Plain and simple. And nobody wants to watch them try anymore. For the love of god can we move on from the 80’s!!!

  • Just facts

    It is beyond doubt that the team should have been better and needs to be better but it is also very likely that had Katz not bought the team they wouldn’t be here. One thing I always remember is a comment my boss made to me when I lived in Winnipeg as the debate raged on whether the original Jets would stay or leave. He said “even if we aren’t that competitive when else to we get to see the best in the world do something once let alone 40 times a year”. I’ve been a fan since they joined the WHA and have continued to be even when I don’t live in Edmonton. And we should keep the pressure on them to be better, but let’s not forget we’ve got the best player in the world and that alone gets us closer to success than most. Too late for me to lose the faith now.

  • Mahaloeh

    Needless to say Chiarelli was an extremely poor choice by Nicholson! He is the one that has put the Oilers in this situation. He probably gets one do-over so he better get it right!

    • Reg Dunlop

      Nicholson is the Earl Warren of hockey. He points all of his fingers at Chia acting alone when common sense dictates that PC was just a patsy. The most ridiculous fact is that Green, MacTavish, Howson and Lowe do not have to hide behind the grassy knoll to remain blameless.

      • camdog

        PC acted alone this season indicates a cultural problem within the organizational executive. The blog about the Old Boys texting Katz behind PC’s back by Gregor painted a clear picture of the dysfunction within the oganisation.

    • Reg Dunlop

      Under previous owners, the oil played in front of 10% fewer seats costing about 30% less per seat. Previous owners were operating under a lease where they had to share game day concession and parking revenue with the landlord. The present owner does not share, in fact his negotiation tactics prove he does not play well with others. The bare minimum he can do is maintain a farm team, just like every other NHL team. He gets no gold stars for doing the basics, at least with me.

      • SSB1963

        I would hazard to say that actually his negotiation skills were far superior to the OEG boys. Katz promised something that the OEG couldn’t or wouldn’t deliver on namely the Ice District.

  • Serious Gord

    From 200 to 750 over 11 years is a 12.77% annual growth rate. Adjusting for inflation that’s annual growth rate of 11%.

    Not bad. But I don’t consider it a “smoking” deal. Especially since there were no other bidders that I’m aware of. And there was a ton of uncertainty at the time.

    Much of that growth is due to the rising tide that is the value of the whole league.
    SBNation places the oilers in the upper middle of the pack for franchise valuation growth.

    Considering the number of number one and other high picks that the oil haven’t grown even more in value is a bit of a scandal.

    • No matter what the contrarian angle is, you’ll find it. Adjust it if you’d like — 11 per cent growth every year over 11 straight years and into 13th place league-wide with one playoff appearance to show for that entire span is the definition of a smoking deal.

          • Serious Gord

            “Relative to what?” Is always the question to ask.

            For example: Donald Trump has a net worth in the billions. Sounds impressive until you look at what his peers in the NY real estate market have done over the same time period. Trump did so poorly there that he fled and got into investments- hotels and golf assets etc. That while highly visible generate no where near the incomes and gains that have been made in Manhattan.

            Katz had lots of other options to invest in besides the oil. And while he has seen appreciation in that asset relative even to pokey very conservative real estate assets like the REIT index he’s only done okay.

            (And if trump had just bought the S&P 500 back in the day he would have made more than twice as much. That’s why in large he’s viewed as such a joke in the New York financial community)

          • Serious Gord

            Oh and by the way the estimated value of these franchises is very tricky. In some markets – EDM and Yyc being two – how many buyers are there who would pay that price?

            And what is the upside earnings potential of the oil versus say the islanders or the devils which if they can catch on in their market have an enormous potential to generate far more income than they currently do.

            The oil could have a Stanley cup level team tomorrow but they have such a tiny media market and small corporate community they can’t make a whole lot more by comparison.

            And this is why the league would rather have seen Connor drafted to an American east coast team.

        • ed from edmonton

          The money invested had appreciated by over 10per cent per annum and this does not include the annual profit Katz takes from the business on a yearly basis. A rule of thumb is that business should return 10 percent of the invested capital. If Forbes is using this rule of thumb Katz is making about $75MC per year on the operation of the team and building. If so his rate of return is well above 10 percent cent. Any business person would be laughing all the way to the bank

  • VK63

    One amusing tidbit.
    The Stars, who are valued higher than the Oilers, are regular recipients of league HRR welfare. The same stuff that pays Florida to sign Coach Q to an outrageous contract and informs the league that Panarin will be heavily solicited by “have nots”. Conveniently ignoring the fact that the marketing department has more staff than the building has patrons (in Florida’s case).

    In the case of Dallas. Without league mandated equalization payments they would be in a world of financial hurt, which is a curious thing to consider given the Forbes ranking. Not that this is an earth shattering observation, the Forbes rankings have been viewed with a measure of contempt by economists for a very long time as they are more invention than fact, in spite of the high regard in which they are held.
    Curious.

    Imagine what the Oilers would be worth if they had half a clue about how to run a team or a building? A largely free (to Katz) building at that.
    Crazy.

  • OnDaWagon

    I think Darryl Katz should offload every player not named McDAVID, and head for the cap floor. The cows will still go to the barn, and he can pocket another few million.

    Come on Darryl…you know you like this idea. Do it Pablo…DO IT !!